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Two Reasons Why the Viacom-YouTube Debate is Important

Just last year I wrote a little bit about why YouTube works. Since then, two major things have happened: YouTube was bought by Google, and large copyright-holding corporations finally noticed it. The almost inevitable result? Billion-dollar lawsuits. I'll let The Daily Show explain the situation better than I can: [youtube]w9CRD1COCAY[/youtube] But really, who cares?  Two multi-billion dollar companies duking it out in court surely doesn't effect you or I.  But there are at least two reasons why it does matter. 1.  It's not about stealing TV shows, and it's not really about YouTube in particular.  It's about control and availability of information. Let me explain:  Viacom doesn't offer all of it's material online, but Comedy Central at least has it's "motherload" interface.  The clip I posted above - and apologies if it has already been deleted - is available there.  They even have a little "embed" link, to help you post the clip in your blog. Notice I didn't use that embed link, and instead have the same clip from YouTube.  No, I'm not trying to be ironic.  I tried using the Comedy Central clip but noticed something sort of odd.  It says "This video expires 04/22/2007." One of the main reasons the Web is so powerful, and so important, is that it makes publishing, storing, and retrieving information cheap, fast, and easy.  Not a little cheaper, a little faster, a little easier - we are talking orders of magnitude. In the past, there were reasons why information might disappear, or be difficult to find.  Books went out of print because someone had to actually print books.  But now, there is no longer any real excuse.  Videos don't naturally expire on a certain date, like bologna.  Keeping the video around for a while doesn't really cost Viacom that much, and bandwidth and storage prices are always going down. I'm sure lots of people use YouTube just to watch TV shows without paying for them, but that's not why YouTube is important - it is important because it makes video available for comment, by anyone, basically forever.  So when a senate candidate uses an delightfully unfamiliar racial slur, but no major news networks are around, the video still gets out. So why should we care that clips from a network that has puppets making crank phone calls are available too?  There's no way to cordon off the important video from the unimportant, because it's too subjective.  In fact, Comedy Central is the perfect example - it has actually been the source for some very, very important video over the past few years. Steven Colbert's explanation of the concept of truthiness was the most insightful commentary on the current administration and it's backers to be seen on any channel.  But I can't find it on Comedy Central's web site.  And any video site hosting it, even in the fair use context of commentary and scholarship, is likely to get a DMCA letter to take it down. If the Viacoms of the world get their way, we will lose something new and amazing - the democratization of commentary and reference in the world of video. 2.  If Viacom wins, in the long term Viacom loses.  Again, video clips are not bologna.  This Daily Show video expires because Viacom doesn't understand the Internet.  The Colbert truthiness video is not immediately available for commentary because Viacom doesn't understand the Internet.  Some stuffy old guy in a well-appointed office made this decision, and the thinking went something like this: "Hmm, this video clip thing is hot according to CEO Fad Magazine, but I don't fully understand how to monetize it."  I suppose he understands enough to put a billion-dollar price tag on the copyright infringement, but not enough to actually make a billion dollars by putting video clips online.  Will this cannibalize DVD sales?  Will people stop subscribing to cable altogether?  So many scary questions! Meanwhile, people like YouTube founders Chad Hurley and Steve Chen, sitting where ever they used to sit, were thinking more like this:  "Wow, we've done the math and the Internet has made an amazing thing possible that has never been possible before.  Let's do it." Now think back to all of the biographies you've read about inventors, founders of major companies, scientists and engineers.  Which mentality, do you think, has driven the American economy to create such amazing amounts of wealth?  How many companies stay successful by avoiding change, becoming confused and disoriented by new possibilities, and trying to fight new technologies with lawsuits? Viacom needs to get a clue and embrace the fact that video distribution and storage has suddenly become easier, faster and cheaper.  They don't have to do so by letting YouTube host videos, but ignoring the lessons that YouTube is teaching the rest of the world is not a good long-term strategy. This is important because there is a lot of money, and there are a lot of entrenched interests, on the clueless side.  These companies are sitting on top of a gold mine but more worried about putting up fences than actually digging up the gold. I don't really care if YouTube or Google Video or iFilm or whoever has clips of this show or that.  I'm not interested in whether they paid for them, if so how much, whatever.  If this was all just fighting over whether or not college kids can watch blurry little South Park clips for free in their dorms, we could all safely ignore it. But this is important, and hopefully you are paying attention.

Bank of America: Up your nose with a rubber hose!

How may we disappoint you today? How may we disappoint you today?
I really used to love my credit card company. That's sort of an odd thing - like loving your cable provider or your electricity company. But every time I interacted with MBNA, I came away pleased. Maybe it's because one always expects poor customer service these days, and a good customer service experience ends up being infinitely more satisfying than you could ever imagine. MBNA and I had a wonderful relationship since 1998. I didn't screw them over (I was the very model of a modern credit-having individual) and they didn't screw me over. They sent me cool perks. They gave me great rates. Their Web site was awesome. It was a dream come true. I was faithful to them and not only did I get myself a second card, I recommended my parents to them and got a business account for my business. In 2006 I was informed that MBNA was merging with Bank of America. Now, I'd not heard much about BOA. MBNA was such a huge presence here in Cleveland that I just assumed MBNA would be swallowing up BOA and millions of new customers would enjoy the same wonderful customer service as me and that'd be the end of it. I was sorely mistaken. Bank of America swallowed up MBNA and within a few short months proceeded to spew its glistening guts all over my pristine view of the credit card industry. This is a really fucking long rant about Bank of America and how it sucks. If you are into this sort of thing... First and foremost, Bank of America is a bank. MBNA was more or less a credit card company. Credit card companies are very good at having solid credit card services for credit card holders. Banks, it seems, are very much into charging fees as well as having antiquated services as a holdover from their beginnings in 1902. Bank of America bills this as "being able to serve you better by offering you more options," while someone like me sees this as "great, more ways to try to confuse me into buying services." Since the above really just makes me sound like an old coot who likes to rant about stuff just because changes have occurred, I'll give some specific examples of their suckitude. Then you can decide more easily on how much sympathy I should have. 1. The merger seems to have come as a surprise to the BOA staff. Especially their Online Services staff. I suspect some stuffed shirts at the very top of the chain said "yes, we can do this merger quickly and efficiently with very little planning and have it all running smoothly within a month" while no one bothered to ask the IT guys doing the actual work if it could be possible. Turns out, it wasn't very possible. Just before the merger I had gotten into using Quicken as my "money management software." Quicken has been around a long time. Most good financial institutions are modern enough to let you download your monthly statements in the Quicken format and with the push of a button import all of your data to the software. Companies who are even more savvy let you download the information directly through Quicken without having to visit a Web site. MBNA had this going. BOA, on the other hand, did not have this going. At least not for their newly-acquired MBNA accounts. First, it took a few months for my statements to even show up online. Once they were there, I wanted to get them into Quicken. But there was no Quicken option - even though the site's skeleton help system gave instructions on what non-existent buttons to push to get your statements in this format. Eventually I found a notice saying to please call this number for Quicken support. I called said number. The unusually rude operator at the other end was not really sure what Quicken was (seriously! At the special BOA Quicken number!)...but once she figured it out, she was able to tell me that there was no Quicken support for MBNA customers just yet. Try again soon. Five months later now, still no Quicken support. I have the option of getting my statements in PDF or Text format - both pretty useless for importing into software as specific as Quicken. 2. The Web site is very slow, confusing and buggy. I understand that many Web sites can be slow from time to time, but BOA is slow more often than not. Due to the tremendous amount of information they are trying to pack in there about the 400 other services I could be enrolled in, it's extremely hard to find what you want and everything takes several clicks. As I mentioned above, their help system is atrocious. Clicking "help" brings up a new, poorly-designed framed window with very little information on the subject you are looking for. It has plenty of info on making a new account with their various financial services but that's about it. No search, and it's hard to read. Nowhere on the site can you see your monthly finance charge. You have to download the PDF of the statement to get that info. This info is crucial, of course, for people like me who need to balance their accounts by typing all charges into Quicken (as opposed to downloading them). 3. Their phone system is the epitome of "CAN'T I JUST TALK TO A HUMAN NOW?!" First, it seems that in the merger, all of their phone numbers had changed (once again, no one told the Web guys). So you call a number often to hear a voice saying that you must actually call another number. Once you get the right number, the menus start. The computer's voice is friendly enough but the options and menus are endless. Because they want to know which of these seventeen banking services you are calling about. Credit cards are lumped with loan accounts so you have to listen carefully. Yesterday I called to ask some questions about my business account. First I got the "wrong number" message after calling the number prominently placed on the Web site. Then I went through several menus trying to figure out what kind of account I had (they weren't interested in separating my business status from a regular personal account). Of course they asked for the last 4 digits of my Social Security Number, which my business doesn't have. Finally we (me and the computer voice) established that I needed help with my online account (which I did - more on that later) and I was told I was being connected thusly. Then it hung up on me. 4. The MBNA Business accounts didn't switch over to BOA until March 1 (several months after the initial consumer products were switched). This month I got to experience BOA's Business services for the first time. When I logged on, I was met with a barrage of options and restrictions for Business cardholders (I had also gotten all of this stuff in the mail, which included a heck of a lot of rule changes). I was also gleefully extended the offer of being able to "upgrade" my account to be able to download my statements into QuickBooks (Quicken's business-minded older brother), pay bills online and have some sort of "direct deposit" service for my company. Each service cost an extra $10 per month PLUS a base fee of $10 just for the privilege of being able to pay them $10 more per month. I was actually sort of intrigued by the idea of being able to do direct deposit for my employees (except not at $20/mo. They can drag their asses to the bank themselves.) But there was no info on what this entailed. Was it true direct deposit? The link for "more information" went to a dead page. What I really wanted to do was pay my bill online. Just like I had done with MBNA. Just like I do now with my personal accounts. For free, from my bank account, biggity-bam. Well, BOA was insistent that if I wanted to do this, I needed to open a BOA checking account. That sounded absurd...but the message at the top of the page said I could call this number to get it set up. I figured I could at least get ahold of someone who could tell me what I really needed to do to be able to pay my bill online. The number that they showed was the disconnected one (see above) and the one that ultimately hung up on me. I checked out "Transfer Funds" instead. I mean, I just wanted to transfer funds from my bank to their bank. Well, once again I was prompted to open some other sort of account. Not gonna happen. Finally I went to their Customer Service page in the hopes that I might find another number - that actually was in service - where someone could please tell me how I could pay my bill online. And right there, buried 2/3 of the way down the Customer Service page, was a link to "Pay from another financial institution." I cautiously clicked the link, anticipating another application form, when there it was - A WAY TO PAY MY BILL ONLINE FOR FREE. Put in the amount, routing number and bank account number and you're all set. That was easy. Easy to carry out - not easy to find. Not obvious or convenient. Of course, there's no sort of fancy "save this information" option so I can easily carry this payment scheme out again in the future. But it's there. Also "hidden" on the site is the ability to download statements in QuickBooks or Quicken format (remember, you can't do this for MBNA-to-BOA personal card accounts yet). The very feature that Bank of America ASSURED me would not be available unless I paid them $10/mo for the "upgrade." ----- So my experience with Bank of America has not been pleasant at all. The customer service has been less than stellar, the Web services are blah and the business service has been nothing but a headache. Plans are definitely in the works for kicking BOA to the curb, as far as my business goes. My personal accounts are sort of set there for a while, as my oldest credit card account is through them and it is a very good practice to keep your oldest accounts open in order to establish good credit. But, with no annual fees, there's no reason to keep using them. My choice so far, the card company that LEAST offends me, is CitiBank. I recently got a personal card through them and while I am not nearly as satisfied with Citi as I was with MBNA, they have so far offended me less than BOA. Citi's sites seem to be confusing too, and their rates don't touch what I had with MBNA, but they have some nice perks and a pleasant-enough customer service staff. And I get $25 a pop for everyone I refer to Citi who ends up getting an account - so everyone I referred to MBNA is going to be getting referred to Citi now. If anyone has any suggestions as to what company I should switch to, that'd be helpful (both business and personal). Or, share your credit card horror stories. Or better yet - give me your email address so I can refer you to Citi! ;)

Steve Jobs is Right Again – People Will Pay for Free Music

Steve Jobs is right again. In a post on the Apple web site he reacts to calls for Apple to open their Fairplay DRM system to licensing with an interesting (and insightful) proposal:
"The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat."
This has gotten a lot of coverage today, from Business Week to the New York Times. Jobs' post was prompted by a number of European countries examining (and in some cases declaring illegal) the digital rights management (DRM) system that Apple uses with the iTunes music store and the iPod. The system is there to make sure that if you cough up $.99 for a song, you don't spread it around the internet for free. These countries say the effect is to lock customers in to iPods and iTunes so they can't buy another player without forfeiting their music. Jobs' response? He never wanted to have a DRM system in the first place. He would gladly dump the whole thing, and let you buy music anywhere you wanted and use any player you wanted - but it's not up to Apple. Although you might buy your Ben Folds from iTunes, Apple doesn't have any of the rights to that music - the vast majority of the time, the rights are owned by a major record label, with just four labels dominating the market. They require DRM. That said, why wouldn't Apple like the idea of DRM? A naive observer (or record company executive) would say it's good for Apple, too, since it means iPod buyers will use the iTunes store and vice-versa, and it forces people to buy songs instead of pirating them. This is why Steve Jobs has been so successful. He thinks more people will pay for free music than music tied up in the rules and inconvenience of DRM. And he's right. To understand why, you need a little history. Starting in the mid 90s but really picking up around 1997, MP3s started popping up here and there on web sites. At first it seemed like most MP3s were available from fan sites for particular bands or genres, but soon mass-popularity mp3 sites started popping up and getting a lot of traffic. Pretty soon most of them were filled with banner ads and made useless by spam. But no matter, because in 1999 Napster came out, allowing peer-to-peer sharing of music files. Millions of people used Napster to download songs. The record companies, represented by their organization the RIAA, took them to court. Napster, they said, was providing the means for the outright theft of millions of songs, and should be shut down. And it was, in 2001. But here's where Jobs (along with many other commentators who don't have billion-dollar companies behind them) saw something the record companies did not - people were downloading songs without paying, sure, but if you wanted to download music there was no way to pay for it. Clearly there was a demand, and where there is a demand, there is a market, but the labels were not interested in it at all. They said these millions of people were just theives, that no one would ever pay for a download. Nothing useful happened until 2003 when Apple opened the iTunes music store, and Jobs proved them wrong. I don't think it took a singular genius to do so, since a lot of people at the time were all saying the same thing: give us a way to pay for downloads, and we will. But he had the opportunity and the ability to convince record labels to try it out. And it worked. Downloads have not replaced CD sales, but they have been growing very, very quickly considering the labels said they would never work and they still compete with free downloads. Why haven't downloads replaced CD sales? They are different media, and in some ways will always be different - some people like the phsyical object, CDs make a better gift, etc. But a big part of the reason is that downloads are made artificially into an inferior good because of DRM restrictions. Here's an example of how DRM removes value. CDs are generally not restricted, but once in a while a label will try to restrict them in some way. On one of the very rare occasions we were listening to commercial radio, my wife and I heard a song by Kasabian that we liked. We went out and got the CD. The first thing we did after listening to it in the car was put it in my computer to rip the songs to MP3. I spend a lot of time at my desk so I listen to music at my computer more than anywhere else, so I generally rip all my CDs and listen to my large music library. The CD had some copy-protection scheme that caused the tracks to skip and become garbled. Like all DRM, there's a way around it, but the damage was done - I was too lazy to re-rip, and now I don't hear Kasabian tracks when working on projects or surfing the web and they have fallen off my list of bands to look for when buying music. Further, it felt to me personally like an attack on my computer. All my other CDs worked just fine, but this one didn't-taking something that works and making it not work is usually called "breaking it," and it seemed to me that the record label was trying to break my CD and my computer. I've never been one to take pride in having obscure tastes, but this no doubt contributed to my steady loss of interest in buying new mainstream music. Lately I've been sampling (often free) stuff from indies instead. The value of that CD was much, much less to me than others I had purchased because of DRM, and the DRM had the long-term effect of shrinking the music market, if only just a little bit (my personal spending). I spend much of my time as a programmer, and programmers tend to be logical, realistic people. We tend to think things like DRM are ultimately unworkable because we know there is no such thing as a perfectly secure solution. We also get annoyed when it is difficult to move data from one format to another, whether it's because the libraries are buggy or because of purposeful restrictions. We also don't take kindly to the ridiculousness surrounding the enforcement in the legal system - evidence that only works in court because judges don't understand the technology, penalties in the thousands of dollars per song, etc. So maybe I am biased against DRM. But if I could buy songs from iTunes (or wherever) without DRM, and play them on whatever device I want, I would. I don't think I'm the only one. And Jobs has been trying to make this point for a long time. In a Rolling Stone interview from 2003 (thanks to Guillaume Laurent’s tech blog for reminding me of the reference) he explains:
"When we first went to talk to these record companies -- you know, it was a while ago. It took us 18 months. And at first we said: None of this technology that you're talking about's gonna work. We have Ph.D.'s here, that know the stuff cold, and we don't believe it's possible to protect digital content. ... What's new is this amazingly efficient distribution system for stolen property called the Internet -- and no one's gonna shut down the Internet. And it only takes one stolen copy to be on the Internet. And the way we expressed it to them is: Pick one lock -- open every door. It only takes one person to pick a lock. Worst case: Somebody just takes the analog outputs of their CD player and rerecords it -- puts it on the Internet. You'll never stop that. So what you have to do is compete with it."
Some say this is just a ploy to deflect criticism from Apple to the music industry. It seems to me that if Jobs just wanted to deflect critism, he would just start licensing Fairplay. If he wanted to deflect criticism and maintain a competitive advantage, he would license Fairplay at a high engouh cost that, when coupled witht he demands of music publishers, would make competition with iTunes very difficult. He could decide to to it today and have to first licensee up and running in a week. But that's not the point - the point is expanding the market as a whole. And the best way to do that is to make the product more valuable to the consumer, and one very quick, very easy way to increase the value is to dump the DRM.

iTunes 7 Crashes and Freezes, or How to Ruin the User Experience

Apple gets a lot of credit for putting effort into the user experience. Many attribute the success of the original Mac, iPods, the iTunes Music Store, iBooks, and their other products to ease of use. But building a brand based on user experience can be much harder than, say, a brand based on low prices (like Dell) or ubiquity (like Microsoft). Because it doesn't take too much to go from "it just works" to "it doesn't work," which has been my experience with iTunes 7. The worst problem: it freezes up whenever I don't have an internet connection. For a long time, I used WinAmp as my MP3 player. As a nerdy web developer, I'm stuck at my computer for inordinate amounts of time, so I tend to listen to a lot of music through my SoundBlaster. By long time, I mean 1997 through a few years ago. I didn't have much of my collection ripped, so a static list of the 100-or-so songs I did have converted was fine. After ripping the majority of my CD library, and getting my wife an iPod, I started using iTunes. WinAmp has media library features, but I just liked iTunes better. Fast forward to 2006, when iTunes version 7 appears. It added some cool features, like album covers. It also was pretty buggy. Apple has released a few fixes so far, but now with even the latest version - iTunes 7.0.2 on Windows 2000 - I run into issues whenever my Internet connection goes down, or I have VPN up and running, blocking all traffic. It will start up and play like normal, but then after a few songs, the audio cuts off. Sometimes the track looks like it is continuing to play, others the time stops ticking off as well. Skipping to the next track results in more silence. When I finally close iTunes, it doesn't really close - I have to go into the Task Manager and manually end the process. I've done some Googling to see if there was a solution, but so far no luck. I found a blog post by Don Loper talking about freezing, but disabling automatic checking for podcasts did not resolve my issue. I tried disabling Audioscrobbler, a great plugin that uploads what you've been listening to to last.fm, and anything else that looked like it might be trying to send or receive data. Still no dice. Now, this is obviously not a huge problem, but when I'm dialing in to work from home, it would be nice to be able to listen to music. I can always dig up WinAmp, but I don't want to bother importing or recreating playlists. My solution so far has been to listen to NPR on my headphones. The risk that Apple runs with each release of iTunes is that bugs, even if they are fairly uncommon, can put the breaks on the flow of the user experience like Fred Flinstone jamming his feet through the floor of his stony, Neanderthal car. Which is why all the hype (and the 6 month lead time) around the iPhone could still blow up in their faces. My advice: test, test, test, and do it with actual users. Oh, and anyone have any ideas to fix my freezes that I haven't tried yet?

We called it – 8 Apple iPhone predictions that came true

Today Apple finally released details about their new iPhone. There have been rumors and speculation about how Apple could bring it's iPod design skills to the mobile phone world for years now. Lots of web sites have posted predictions, feature wish lists, insider information and supposed leaks, including this one.

Does the iPhone live up to the hype? We'll take a look at it by going down the list of our 10 predictions about the Apple iPhone.Apple iPhone

1. Simple controls. - Apple has struck a blow against the proliferation of buttons by creating a phone with only a few buttons and a large touchscreen. This is a welcome change from smartphones and PDA-phones which have a whole QUERTY keyboard. The keyboard is nice the 5 percent of the time I'm taking notes to texting, but 95 percent of the time they just make it harder to hit the button I do want.

2. Consistent controls - This is a little bit harder to judge without having an iPhone in hand to play with, but from the demos and the fact that the iPhone runs OSX it seems likely you won't have to learn totally different ways to navigate your voicemail, songs, and photos any more. At the very least Apple has solved the mystery of the Green “dial� button and the OK button.

3. Innovative controls with obvious affordances - The iPhone's control scheme definitely falls into the innovative category, but is it's use obvious? Although I missed my guess about hanging up the phone, some of the features are automated responses to actions people are already very used to performing. The touch screen turns off when you put it close to your face, and the display shifts to landscape when you turn it. The learnability and obviousness of the individual applications which use the touch screen are a little harder to judge just yet (especially for old codgers), but it is nice to see the use of large, simple icons like the Palm or Blackberry rather that a Windows-style Start Menu, which just plain sucks on small devices.

4. Streamlined interaction design. - Apple has chosen to put Phone, Mail, Web and iPod icons along the bottom of the screen for ease of access. Presumably they expect other features, like the Calendar and Maps, to be used less often and so they are represented by icons filling the top of the screen. Assuming they are right about which tasks are most commonly used, this is a smart move. Calling and iPod functionality are obviously the biggies and are located appropriately at the corners in compliance with Fitt's Law. Will email and web browsing be as important? Millions of blackberry users say yes to the former, and built-in wifi make the latter possible.

5. No more disgusting face grease on your screen. - Unless the touchscreen is coated with some miracle material, maybe not. But wait - it looks like the solution comes in the form of the included hands-free headphones and optional bluetooth headset. I'm still a little surprised that the horror of gobs of face grease all over his beautiful device didn't push Steve Jobs over the edge. Apparently he can console himself with the thought that most people will use the headphones to listen to music and all the cool kids have headsets.

6. No more lock in - Not so fast. The iPhone is a Cingular exclusive, at least in the U.S., at least for now. It works on GSM, which is a widely used standard, and I am pretty amazed that Cingular is allowing a device with built-in wifi, but I will take this one as a failed prediction.

7. It will look really, really nice - This is, of course, completely subjective, but I have a feeling a lot of people will be lusting over iPhones when they hit stores this summer.

8. Integrated voicemail, chat, SMS and email - Hit the nail on the head with this one. This is the first device I've seen which takes the obvious step of allowing you to manage your voicemail the same way you do email. No more listening to 4 messages to get to the one you actually want to delete.

9. No camera - I was completely wrong on this one. The iPhone has a 2 megapixel camera built-in. I still think cameras on phones are really only used by drunk people and people with new phones. Maybe I have to add a new category, people who will soon be famous on YouTube.

10. Connectivity - The iPhone has bluetooth, Wifi, and EDGE meaning lots of potential for connectivity. Since it runs OSX, I'm guess that means the sky's the limit on how you connect and transfer files around. This is a very smart move – get your customers used to using the Internet often enough with Wifi, and they'll start wanting to use it all the time with EDGE (and an expensive data plan).

So that's that - our record was 8 out of ten. Not bad for a site with no insider information.

What did we miss? Let us know in the comments below.